introduction tointernational 1 projectmanagement · introduction 1.1...

LEARNING OBJECTIVESAfter studying this chapter, you will be able to:

• grasp the concept of a project

• comprehend the main characteristics and components of projectmanagement

• identify the major project stakeholders

• understand the concept of a program

• know the historical development and theoretical underpinningsof project management

• assess the constraints of project management methods

• differentiate between a ‘standard’ project and an internationalproject

• elucidate the characteristics of international projects

• discuss the key success criteria for the management of inter-national projects.

1INTRODUCTIONTO INTERNATIONALPROJECT MANAGEMENT

Koster-3903-Ch-01:Banyard Sample.qxp 04/06/2009 6:34 PM

INTRODUCTION

1.1For three decades globalization has been increasing at an ever fasterpace. The huge economies in Asia, China and India have opened up andbecome very successful competitors to the Western world and the

Japanese. Russia, Brazil, and the Gulf region are following suit. Organizations need tobecome increasingly cost efficient due to fiercer global competition Global marketswere deregulated, allowing for production capabilities to be shifted to low-wagecountries. The realignment of global business forces was enabled by advances intechnology that had an enormous impact on how business is done. Most significant werethe innovations in telecommunications and computing. Organizations now have theability to replicate their infrastructure in many different locations. One internationallyoperating retail chain boasts that it can build up a new outlet on each continent within60 days (Lientz and Rea, 2003). Organizations also can control remote locations on areal time basis. Thanks to the internet, all entities of an organization scattered around theglobe can exchange information easily – at least in theory – due to standardizedhardware and software.Globalization has brought us a more integrated and interdependent world economy.

To adapt to this new environment and to thrive in it, organization need to undergomajor changes. All kind of organizations initiate a whole range of different internationalprojects in order to implement the necessary adaptations to a changed environment.Although ubiquitous, international projects are not necessarily leading to organizational

success. In 2004, PriceWaterhouseCoopers analysed a broad range of industries, large andsmall, in 30 different countries, which carried out 10,640 projects with an overall value of7.2 billion US$. They found that only 2.5 per cent of global businesses achieved projectsuccess (Stanleigh, 2006). The measure of project success may be debatable, but this is stillan alarming number. More needs to be done to make project management more efficientand effective on a global scale. This book aims at providing advanced students andpractitioners with hands-on knowledge to enable them to contribute to future successes ofinternational projects.I will start laying the foundation with explaining the relevant terminology, defining a

project, project management, and the main project stakeholders. I will also discuss therelationship between a project and a program. We will have a look at the historical andtheoretical roots of project management to help us to assess the global applicability ofproject management. Based on this foundation, we will dive into the topic of internationalproject management, starting with a differentiation between a ‘standard’ project and aninternational project. The emphasis of this chapter is a detailed discussion of the maincharacteristics of an international project as project management methods need to beattuned to those characteristics. We will also have a look into the major critical successcriteria for international projects. I will wrap up the chapter with an outline of thestructure of this book, following a project management knowledge area approach and anopen systems approach.

2INTERNATIONAL PROJECT MANAGEMENT


WHAT IS A PROJECT?

1.2There is a variety of definitions regarding what exactly a project is. Forthe purpose of this book, I will follow Turner’s definition. He sees aproject as ‘an endeavour in which human, material and financial

resources are organized in a novel way, to undertake a unique scope of work, of givenspecification, within constraints of cost and time, so as to achieve beneficial changedefined by quantitative and qualitative objectives’ (1993: 8).In contrast to the routine work in an organization, which also could be called

processes or operations management, the objective of a project usually is a new statedifferent from the usual work. Operations typically are ongoing and repetitive,whereas projects are temporary and unique.Within the family of projects, however, there are big differences, for instance in size.

A project can involve only two people and a relatively small amount of money, likea honeymoon trip to Hawaii. Or it can be a so-called mega-project like one of thebiggest cross-national infrastructure projects of the world, the 15.5 kilometres longOresund coast-to-coast link connecting Denmark (Continental Europe) with Sweden(Scandinavia) which was opened in the year 2000 and built at a cost of roughly 2 billionEuros (Flyvberg et al., 2003).Projects can also differ in the kind of organization initiating the project, the industry

the project belongs to, the purpose and the scope of the project. There can be differentstakeholders and customers. Project duration can be long or short. The project can bepart of primary activities like Research and Development, Manufacturing, Marketingand Sales, or it can belong to secondary activities of the value chain such as InformationTechnology (IT), or Human Resources (HR). You find a systematic overview of differenttypes of projects on the companion website.Regardless of the type of project, each project has three main characteristics in

common, although these characteristics may be of different weight for differentprojects as can be seen in Figure 1.1. Accordingly, projects are limited, unique, andrisky. In the following, I comment on each criterion.

LIMITED

A project is intended to have a temporary character, which in reality may take a verylong time. According to the research of Cooke-Davies (2002), a project, or at least awell-defined part of the project, should not exceed three years. In general, each projectshould have a clearly defined beginning and end. A project produces an output whichusually is clearly defined, for example a new tangible of intangible asset. This may beabstract like a higher competence level of managers, or more concrete like the develop-ment of a new drug which has the potential for a blockbuster. A project typically deliversbeneficial change. The value of the outcome of the project should justify the resourcesinvested in the project.

INTRODUCTION TO INTERNATIONAL PROJECT MANAGEMENT3


UNIQUE

Different projects can have different objectives, are embedded in a different context,and usually are launched by different organizations or different entities of the organiza-tion. In general, the uniqueness is based on the fact that projects are non-routineendeavours. This is even the case with projects which seem to be repetitive like theestablishment of new outlet of a retail chain. They all give customers the same brandfeeling; however, the establishment of each outlet is different, needs to be planned withthe legal requirements of the respective country in mind, for instance regarding hygieneregulations and safety standards.

RISKY

Since projects comprise non-routine work, they do involve uncertainty. This means riskwhich has to be managed. For instance the requirements of consumers can changequickly. Nowadays, mobile phones without a camera are hard to sell compared to thebeginning of this decade. Giving another example, a competitor might launch a similarproduct earlier at a lower price, as it happened with Nintendo’s home video game con-sole ‘Wii’ which was launched in December 2006, much to the grief of Sony whoselaunch of PlayStation 3 had been delayed to spring 2007. To give yet another example,


Risky

Uncertainty,Complexity

Limited

Duration, Scope,Financial

Resources, HumanResourcesUnique

Objectives,Context,

Organization

Characteristics of a project

FIGURE 1.1 The main characteristics of a project


a pharmaceutical company may discover dangerous side-effects of a newly developeddrug after nine years of research. Hence, it has to abandon the whole project.

WHAT IS PROJECT MANAGEMENT?

1.3Section 1.2 defined projects as bringing beneficial change to anorganization. In other words, the results of projects should bring valueto the organization, rather than destroying value. Consequently, the

organization needs to manage the resources used for projects carefully. Projectmanagement deals with what it takes to manage projects to create value for theorganization. The Association of Project Management (APM) (2006a: 3) definesproject management as ‘the process by which projects are defined, planned,monitored, controlled and delivered such that the agreed benefits are realised’. Thisdefinition indicates that project management takes a staged approach to reducecomplexity and ensure efficiency. Several phases connect the beginning of a projectwith its end. This is also known as project life cycle or project management life cycle.According to the Project Management Institute (PMI) (2004: 20), ‘There is no singlebest way to define an ideal project life cycle.’ Depending on the organization andthe nature of business it is operating in, there may be sub-phases such as thedevelopment of prototypes, the approval of prototypes and the ramp up for massproduction for a manufacturing project. Frame (2002) postulates that the projectlife cycle should by default include after sales service in order to increase customersatisfaction with the outcomes of projects and to smooth the interface betweenprojects and operations management. Typically, the project life cycle consists of fourmain phases as depicted in Figure 1.2. Let me briefly explain the main tasks of thefour phases.

PHASE 1 INITIATING

The initiating phase is also often called the front-end or kick-off phase. The need or theopportunity is confirmed. The project concept is developed after the overall feasibilityof the project has been carefully considered and determined. In this phase, the businesscase for the project is developed. I will discuss the details of this phase in Chapter 3.

PHASE 2 PLANNING

The essence of project planning is to decide what needs to be done in order to deliverthe project objectives within the given organizational constraints. As a result of thisphase, the so-called project management plan or project master plan is delivered, alongwith the identification of resources required for the implementation of the project. Youfind more details of this phase in Chapters 3, 4, 5, and 6.



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PHASE 3 EXECUTING/CONTROLLING

During the execution or implementation phase, the project plan is implemented, mon-itored and controlled. In the case of a product, the product design is finalized in thisphase and used to build the deliverables of the project. Chapter 7 will provide you withfurther explanations.

PHASE 4 COMPLETION

The completion, termination or closeout phase consists of the handover of the productor service to the internal or external customer. Moreover, a final review of the wholeproject is done in order to learn from past mistakes and successes. The project teamwill be redeployed. Refer to Chapter 11 for more details.Projects are part of an organization which is endorsed with limited resources only.

We speak about organizational constraints. It is the purpose of project management todeliver projects on time, in budget and to scope with an agreed on quality level. This isalso called the ‘Magic Triangle’. The constraints emerge because on one hand, onlylimited resources in terms of time, financial and human resources are available. On theother hand, a pre-defined scope has to be delivered with an acceptable quality level.

INTERNATIONAL PROJECT MANAGEMENT

1.• Initiating

2.• Planning

3.• Executing/Controlling

4.• Completion

Initial state(company internal idea, customer requirement)

International environmentInternational environment

Objective(product, service, result)

Strategy, Project portfolio

Organization

PROJECT

FIGURE 1.2 The project management life cycle


Project management should ensure that the project is carried out effectively (that theresult of the project ‘works’) and efficiently (that the work is done at minimum effortand cost).

WHO ARE THE MAIN PROJECTSTAKEHOLDERS?

1.4Now we know what project management is. But who are the mainplayers within the context of project management? They are thestakeholders.

Project stakeholders are individuals, groups, or organizations that are either activelyinvolved in a project, or whose interests may be affected positively or negatively as aresult of project completion. Stakeholders may have different interests and perspectives.For the sake of efficiency and to ensure accountability, it is important to clearly identifythe responsibilities and authorities of each stakeholder.

Project owner and project sponsor: While the project owner provides the resourcesto deliver the project results, the project sponsor has the responsibility to channel theresources to a project on the owner’s behalf. However, there is no standardizeddefinition in the literature. Both terms are frequently used synonymously. According tothe Project Management Institute (2004), the project sponsor is the person thatprovides the financial resources. Kerzner (2006) portrays a project sponsor as a seniorexecutive of the organization who champions and supports the project. The sponsor,for instance, can function as the executive–client contact point or as the final escalationpoint for project conflicts. Some organizations do not work with one single sponsor,but with a group of sponsors who are structured in a steering committee.Sometimes, the word ‘investor’ is used synonymously with project owner or sponsor.

But the investor can also be a separate stakeholder, namely the financier, like a bank.In the case of an inter-organizational project, there can be several project owners in

different organizations involved.Contractor: The contractor is the group (or individual) using the capital of the owner

in order to produce the product/service or result the owner wants to have. In the case ofan internal project, the contractors can become the users. Often, the term is used fororganizations in a consortium working together to deliver a product or service foranother organization, the project owner or customer.

Customer/User: Another role is the customer who takes advantage of the projectoutcome. The customer also provides the resources for the project (project owner). Theusers are the individuals benefiting from the project result without directly providingresources for the project.

Project manager: This is the individual responsible for planning, organizing,implementing and controlling the work to ensure that the customer (owner) gets theintended benefits of the project.



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Project management team: In a consortium or in complex projects, there usually aresub-project managers, like team leaders with dedicated areas they manage on behalf ofthe project manager. However, they report to the project manager who is responsibleto the customer.

Project team members: The members in the project team who are directly involvedin the project and who contribute to its completion.Figure 1.3 sets out the main stakeholders and their interaction in two kinds of projects:

intra-organizational and inter-organizational.Apart from those main groups of stakeholders, there can be industry lobbies or

environment protection groups who support or fight the project. In general, theinterests of all stakeholders need to be taken into consideration to ensure successfulproject management. In the international context, the identification and integration ofstakeholder interests is especially complicated, as we will see in Chapter 3.


Require-ments

Require-ments

Require-ments

Require-ments

Require-ments

Require-ments

Internal customer

Project Owner/Project Sponsor

Project Owner/Project Sponsor

External customer/InvestorUsers Users

Results Results

Results Results

Project Manager ofLeading Contractor

Project Manager

Results Results

Project Management Team Contractors with PM

A B C

Project Team Members Subcontractors with PMs1 2 3 1 2 31 2 3

FIGURE 1.3 Main project stakeholders in intra- and inter-organizational projects


We have learnt what a project is, what project management is, and who the mainactors within a project are. When we have a look at organizations, though, we can’t helpnoticing that they are dealing not with one single project, but with a whole plethora ofprojects. In order to better co-ordinate projects and not to lose control, organizationscreate so-called programs.

WHAT IS A PROGRAM?

1.5A program is a bundle of projects pursuing the same purpose. A programhas the same main characteristics as a project (cf. Figure 1.1). However, itusually has a longer duration and requires more resources. Apart from

co-ordination benefits, programs allow for the realization of synergy effects betweenprojects. An example of a program is the implementation of a new integrated IT-systemin a multinational corporation after the acquisition of a former competitor comprisingthe following single projects:

• project of stock taking with the purpose of enlisting all relevant informationsystems in company A and company B

• project of designing the most efficient, new cross-functional processes in thenew integrated company

• project of evaluating which existing information systems can support thenewly designed processes

• project of benchmarking with other information systems based on criterialike cost, quality, etc.

• project of running a pilot of the new information system in a designatedsubsidiary

• project of rolling out the new information system worldwide.

‘In contrast to project management, program management is the centralized,coordinated management of a group of projects to achieve the program’s strategicobjectives and benefits’ (PMI, 2004: 16). I will further discuss the role and importanceof programs related to the implementation of an organization’s strategy in Chapter 2.To complete the basic knowledge about project management, I will outline the history

and theoretical underpinnings of project management in the next section, 1.6.

WHERE DOES PROJECT MANAGEMENT COMEFROM, AND WHERE DOES IT GO TO?

1.6Accomplishments of mankind like the pyramids in Egypt or the GreatWall of China can be regarded as early projects. On an internationallevel, Alexander the Great can be viewed as an early project manager

conquering a huge part of the known world.



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The relevant management thought underlying project management was alreadydeveloped in the late 19th and early 20th century by people like the French HenriFayol, and the US-Americans Frederick Taylor, and Henry Gantt. Fayol was one of thefirst thinkers putting management on a broader theoretical basis. His philosophyrevolves around optimization of an organization in order to achieve its objectives mostefficiently. Taylor, the father of the so-called scientific management, emphasized theoptimization of the production process. In contrast to Taylor who focused onrepetitive work, Gantt studied the management of navy ship construction that meantwork with a beginning and an end. As a result he developed a scheduling tool in the1910s which carries his name and is used until now, the Gantt chart.While these early thinkers laid the ground, general systems theory emerging in

the 1950s has provided project management with its theoretical foundation.General systems theory attempts to analyse and solve issues by assuming a holisticview rather through analysing the single components of the issue. General systemsmanagement implies the creation of a management technique that can cut acrossmany organizational disciplines such as Research and Development, Purchasing,Manufacturing, Logistics, Marketing, Sales, Finance, etc., without losing the overview,co-ordinating and managing the whole (Kerzner, 2006). The systems approach and theproject management approach both target facilitating change from an initial startingpoint to a defined final position (Harpum, 2004).Between 1945 and 1960, the development of project management was pushed by the

US-American Department of Defense and NASA, who requested one point of contactfor its various arms and weapon projects and space programs. The US government hadentered the Cold War and had a strong interest in winning the race to rapidly buildweapons of mass destruction. It also had a strong interest in controlling those complexprojects with new standards such as project life cycle planning (see Figure 1.2) and timeand cost monitoring tools. With the growing dynamics of technological development,private industry, mainly in the US, started to look for management approaches ableto deal with a changing environment entailing greater complexity. In the 1960s, theaerospace, defence and construction industry applied project management methodology.During the 1970s and 1980s, more companies, for example in the pharmaceutical orconsulting domain, decided to use a formal project management approach to cope withthe bigger and more complex tasks resulting from the following trends (Kerzner, 2006):

• technology developments increasing fast• product development becoming more resource intensive• availability of more information• increasing time pressure on new product or service development.

In the 1990s up to 2008, the organizations’ environment has become even morecomplex and more dynamic due to the ongoing globalization process. Organizations inall industries, with different ownership structures, apply project management to copewith an environment that is increasingly international or global.



At the beginning of this section, I introduced the general systems theory. Comingback to this school of thought, I would like to specify that project management of todayneeds to be built on the open system theory. An organization is regarded as getting inputfrom its environment, transforming it, and then returning it to the environment asoutput. The key feature of the open system approach which makes it useful as thetheoretical basis for project management is that the theory combines the holisticapproach of the general systems theory with the context the system is interrelated with.Open system theory ensures that all relevant factors, inputs or influences on the system,namely the organization, are taken into account (Katz and Kahn, 1969).If a project is a system, it has to be seen as a sub-system in the light of programs or

a whole bundle of programs. These in turn are part of the biggest system in thiscontext, the organization. To view a project as an open and complex system is thebasis for effective project management in an international context as I shall outline insections 1.9 to 1.11.The growing popularity and maturity of project management should not let us

forget its origins, namely the US military sector. Project management as a kind ofapplied general systems management was developed by researchers and theorists.Hofstede (1993: 82) argues that ‘[theorists] grew up in a particular society, in aparticular period, and their ideas cannot help but reflect the constraints of theirenvironment.’ Project management is engrained in certain values of a certain age. Itassumes a normative approach mirroring the values of the Anglo-American world.The whole approach of project management is based on the assumptions of economic

rationality and analysis of means-end chains, for example: the project management lifecycle is based on the assumption that project managers are rational problem solversworking in a sequential way (Muriithi and Crawford, 2003). Project managementliterature seldom questions the overall validity of those values and the resulting classicalproject management orthodoxy. If this methodology is transferred to a context with adifferent set of values, it might be at least partially inappropriate and result in projectfailure. Milosevic (1999) considers project management as culture-bound. Projectmembers from different cultural backgrounds interpret project management practicesdifferently. He calls this the ‘silent project management language’.It could be argued, though, that values are globally converging towards a Western or

even Anglo-American set of values in the wake of a country’s economic developmenttowards industrialization. Japan and other East Asian countries demonstrate that thereare trends of convergence, but many cultural differences still prevail.What does this mean for project management in an international context? Cultural

differences and their impact on project management tools and techniques need to betaken into account for all international projects. Depending on the (cultural)differences between the parties involved in the project, and depending on the nature ofthe project, modifications or extensions of the classical project management methodsmight be needed that I will explore further in this book, concurring with Engwall’s(2003: 790) view that ‘projects have to be conceptualized as contextually-embedded,open systems’.



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WHAT ARE THE MAIN DIFFERENCESBETWEEN A ‘STANDARD‘�� AND ANINTERNATIONAL PROJECT?

1.7Before we turn to the differences between a ‘standard’ and an internationalproject, let me first clarify how I use the term ‘international’. I use theword in a very broad sense, i.e. reaching beyond national boundaries,

usually in terms of the project purpose or nationality of stakeholders. Internationalprojects can be global, involving the entire world, but this is only a sub-group ofinternational projects. International projects typically are simultaneously multiculturalprojects relating to diverse cultures, be it national, organizational, or functional cultures.In the following, I will use the terms ‘international’ and ‘multicultural’ synonymously.‘Virtual’ projects or ‘virtual’ teams are often a part or sub-group of internationalprojects due to the fact that stakeholders of international projects typically aregeographically dispersed.

International projects are not too different from standard projects when it comesto the nature of organization, industry, location in the value chain, and duration. Thereare obvious differences, however, regarding:

• purpose • scope • the main stakeholders• risk intensity.

When I talk about differences, I don’t imply cardinal differences. Project managementtools and techniques that apply for standard projects also apply for international projects.What I am rather referring to are differences in dimensions and magnitude: the manage-ment of international projects simply requires more – more disciplines need to be takeninto account, and more skills are needed as I will explain in the following paragraphs.

MAIN PURPOSES OF INTERNATIONAL PROJECTS

In the following, I will outline the main purposes of international projects providingselected examples for each purpose.

Search for new geographical presence or new international stakeholders

Non-profit organizations have an interest in gaining new supporters on an internationallevel, thus broadening their fund-raising base. With more international members,acquired by new local offices, non-profit organizations usually also have a greaterinfluence on different governments or supranational decision-makers which are



important in their respective areas. An example is Greenpeace, founded in Canada in1971. In 1979, it became a centralized international organization. Today, Greenpeaceis present in 40 countries across Europe, the Americas, Asia, and the Pacific withapprox. 2.8 million supporters. The organization’s strong international presence wasaccompanied by an increase in its global lobbying power which is necessary to achieveits stated organizational purpose: to change attitudes and behavior in order to protectand conserve the environment and to promote peace (Greenpeace, 2006).

Increase of global market share, market power, global politicalpower or global effectiveness

International projects run by governments often have the purpose to increase thepolitical power of one government on a global level. There are manifold motives:examples are wars led by super powers against smaller countries, for instance toensure the supply of natural resources. International projects of governmental agen-cies can also have the purpose of helping other countries to recover from naturalcatastrophes, like the tsunami in South-East Asia in 2004, by teaming up and joiningforces. There are also plenty of projects initiated by governmental agencies of indus-trialized countries to improve living conditions in poorer regions of the world. Anexample is a project financed by the German Ministry for Economic Collaboration tohelp Egyptian peasants to manage irrigation more efficiently (GTZ, 2006).

Realization of efficiency gains

To reduce manufacturing costs, US car manufacturers have transferred factories fromthe USA to Mexico, where the output of assembled cars for the American market hasincreased steeply in 2006 in contrast to the shrinking output in the home market.

According to a report of the market research firm iSuppli from 2006, 82.6 per centof PC notebooks sold by multinationals like Hewlett Packard or Dell Corporation aremanufactured by Taiwanese companies that in turn have their production sites mainly inthe People’s Republic of China (The Inquirer, 2006).

Access to scarce and unique resources

An increasing number of organizations try to develop new products and services withan international workforce. In so-called transnational projects involving membersfrom several corporate units located in different countries, including the headquartersand subsidiaries, companies like the European aeronautics corporation EADS developnew products, for instance satellite equipment.Many non-profit organizations short of financial resources seek volunteers from all

over the world to get talented and committed staff. An example is a small orphanage inBrazil, close to Rio de Janeiro, where a multinational team of volunteers is workingtogether with the local employees to improve the education of the children.




Reduction of risk

An example for risk reduction by international risk sharing is Boeing’s development of thenew aircraft 787, the so-called Dreamliner. Several ‘risk-sharing partners’ scattered aroundthe globe deliver 75 per cent of all parts and components of the aircraft. The central fuse-lage sections, for instance, are built in Southern Italy. From there, they are flown withspecial 747 machines to another supplier in the US located in South Carolina, before thecomponents are assembled by Boeing near Seattle (The Economist, 2007a).Figure 1.4 summarizes the main purposes of an international project.

SCOPE OF INTERNATIONAL PROJECTS

Another substantial difference between standard and international projects lies in thearea of scope. By definition, the scope of an international project goes beyond the usualconditions of the home market of any given organization. For instance, there are severallocations involved, which usually are in different countries. In many international proj-ects, several different entities of an organization are involved, for example headquarters,regional headquarters, and local offices. Due to their strategic importance, many interna-tional projects are more visible within an organization. The survival of an organizationmay depend on the successful management of a single international project, for instancea cross-border merger or acquisition. Bigger scope usually entails greater complexity, assuming that volume increases

complexity in terms of the increase in the number of interfaces, and that organizationsand their members have greater difficulty comprehending something ‘big’ in terms ofparties involved, countries involved, budget involved, etc.

Mainpurposes ofinternational

projects

Realization of efficiencygains

Access to scarce andunique resources

Reduction of risk

Increase of global marketshare, market power,

global political power orglobal effectiveness

Search for newgeographical presence or

new internationalstakeholders

FIGURE 1.4 Main purposes of international projects


STAKEHOLDERS OF INTERNATIONAL PROJECTS

In contrast to standard projects, international projects typically involve non-domesticstakeholders. Especially customers are very often non-domestic and heterogeneousregarding their nationality. Moreover, there tend to be more stakeholders outside theorganization as collaborative international projects are increasing. A US-based IT con-sulting company had to work together with 14 subcontractors from Austria, Germany,Lebanon, Dubai, Greece, and Cyprus to deliver an IT-infrastructure project for a bankin the Gulf region.

RISK INTENSITY OF INTERNATIONAL PROJECTS

International projects usually bear greater risks and uncertainty than other projects. I willdiscuss the details in Chapter 4. One of the reasons is the complexity of an internationalenvironment which is difficult to analyse. Changes are often sudden and unpredictable.Another reason is the complexity of the organizational set-up with the multitude of inter-faces and the large number of stakeholders involved.

Let us close section 1.7 with a Mini Case on Tata Motors covering the main differencesbetween international and standard projects we have discussed above.

Mini Case 1.1: Tata Motors

According to the New Delhi-based National Council of Applied Economic Research over56 million Indians earn over 4,400 US$ annually as of 2006. Against this background, acar priced at half annual income could be very popular. Hence, Tata Motors, a divisionof the country�s second largest and oldest conglomerate, the Tata Group, wants tolaunch a US$2,200 car in 2008. In December 2006, the government of West Bengalapproved the construction of a new factory near Kolkata. In less than 18 months, the firstprototypes of a new low-cost car are scheduled to leave the production line. Tata plans tomass-produce parts and to ship partially or fully knocked-down kits to entrepreneurial-run garages. There, the cars will be assembled, and sold. This ‘People‘s Car‘, by 2008known as the ‘Nano', will have a rear engine, four or five doors and four wheels. Tolower weight and cost, more composite materials will go into the body. The CEO, Mr Tata,wants to achieve his new goal by sourcing technology and materials from ‘wherever itmakes sense‘.The engine management system will come from the US-automotive supplier, Delphi.

Italian design help is coming from the Institute of Development in AutomotiveEngineering (I.D.E.A) Institute (which helped Tata develop its popular Indica sedan). Thecar project may be joined by the Italian auto manufacturer, Fiat, too. Due to increased raw material prices, the forecast price of the People�s Car has

risen to approximately 3,000 US$ before taxes in 2008. In addition, in 2008, Tata Motors


Mini C

ase



was forced to transfer its first Nano production plant from West Bengal to Gujarat dueto violent peasant protests. In the last couple of years, Tata Motors acquired Daewoo Commercial Vehicles of

South Korea. It purchased the Spanish automotive manufacturer, Hispano, andannounced a joint venture with Marcopolo, a Brazilian bus manufacturer.

Source: Kremer (2006); The Economist (2006); AutoAsia (2006); Financial Express (2006); TataMotors (2006); The Economist (2008)

Questions and tasks

1 Identify the purpose of the international projects mentioned above. 2 What main stakeholders can you identify in the various projects? 3 Which risks can you identify?

WHAT ARE THE CHARACTERISTICS OF AN INTERNATIONAL PROJECT?

1.8We have discussed the main differences between ‘standard’ andinternational projects. I will now provide you with a systematicoverview of the characteristics of an international project that is more

multifaceted than a ‘standard’ project. Figure 1.5 depicts all characteristics of aninternational project at one glance. Before I comment on the single characteristics, I would like to emphasize that they

are interrelated. For instance, uniqueness is amplified by diversity, dynamics, riskpropensity and complexity. Complexity and limited resources further contribute torisk, and dynamics and diversity increase complexity. Let me start with one of the most decisive characteristics, namely complexity,

followed by the other characteristics anti-clockwise.

COMPLEXITY

This means that there is a huge variety of factors the project manager has to deal with.Complexity in this context has mainly organizational and geographical causes. Complexityfrom an organizational perspective refers to many intra- and inter-organizational linksexisting in an international project. Multiple stakeholders with partially conflicting inter-ests, located in different entities of the organization or outside the organization atcollaborators’ or the client’s organizations result in a huge number of interdependentinteractions which lead to a very complex project set-up. It is vital for the projectmanager of an international project to find an adequate structure and system to copewith multi-interdependencies. It is also crucial to get to know the different ‘hidden agen-das’ of organizations involved and to include them in the planning of the project.Without the true buy-in of all parties involved, failure is likely to occur.

Mini Case


Complexity from a geographical point of view resides in stakeholders being scatteredaround the globe. The organization and the project manager need to establish systemsand policies to enable smooth communication and co-operation across different timezones. This is a particular challenge with the Americas and Oceania or East Asiancountries simultaneously involved in a project, spanning time zones with a difference ofmore than ten hours.


FIGURE 1.5 Characteristics of an international project

Uniqueness

Risk

Complexity

LimitedResources

Dynamics

Diversity

InternationalProject


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RISK

Due to their complexity, many international projects see budget and time overruns,although this is not unusual with standard projects either. The international environ-ment bears further uncertainty, like sudden political instability. Part of the projectteam might be physically endangered due to guerrilla unrest in a country it is operat-ing in, or members of the team might get hijacked. After a change in political power,the new government might expropriate foreign companies as has happened recentlyin Venezuela. Western and Japanese oil companies nowadays face huge risks withtheir international projects like oil and gas exploration, for instance on the Russianisland Sakhalin (North-East Asia) because the Russian government wants to regain fullcontrol of its natural resources. Different currencies along with local inflation rates,profit repatriation problems, taxation issues, etc. can further add to the risk.

UNIQUENESS

By definition a project is unique. International projects have unique objectives.Daimler acquired Chrysler in 1998 in order to gain market presence in NorthernAmerica, grow bigger and benefit from economies of scale and scope. The biggestChinese PC-manufacturer Lenovo purchased the Personal Computing Division ofIBM in 2005 to get access to IBM-technology, to the US-market and to benefit fromthe well-established IBM-brand they obtained the right to use for five years. International projects are also unique when it comes to the organizations involved,

like an international network of organizations, international alliances, internationaljoint ventures, etc. The context international projects are operating in is also unique. Countries

have different economic and political systems, and different societal structuresand cultures. They have attained different technological development levels,have different attitudes and laws regarding the environment, and are governedby different regulatory regimes.

DIVERSITY

Bennett and Bennett (2004:150) define diversity as ‘cultural differences in values, beliefs,and behaviors learned and shared by groups of interacting people defined by nationality,ethnicity, gender, age, physical status, education, profession, religion, organizational affil-iation, and any other grouping that generates identifiable patterns.’ In the context of thisbook, diversity stemming from differences in culture, education, and profession are mostcrucial. I will use diversity and heterogeneity as synonymous terms throughout this text-book. Different national cultures have a pervasive influence across all project manage-ment phases from definition to completion of the project. Managers and members ofinternational projects need to be aware of this fact. Cultural differences need to bebridged and managed in an efficient way. Project managers have to face a situation where




Mini C

asetheir project members might work in entities with different organizational cultures. Theymight speak different languages. Hence, misunderstandings are the order of the day.Even among English native speakers, the question is: What is ‘standard’ English? Projectstakeholders have gone through different educational systems which lead to differentskills – some might have accumulated a wealth of knowledge but are not capable oftransferring their knowledge to new issues and problems, others might have learned dif-ferent models or are used to different processes and procedures. Diversity is an impor-tant characteristic of international problems and a theme throughout this textbook,comparable to complexity.

DYNAMICS

International projects frequently face numerous and sudden changes. The reasons arefierce competition on global markets, and the fact that there are many parties involved inthe project with self-interest which might not be obvious. Besides, the complex environ-ment offers plenty of new opportunities and risks which need to be acted upon swiftly.An example would be the emergence of a new competitor on the global market, like theKorean manufacturer Samsung in the consumer electronics business in the 1990s.

LIMITED RESOURCES

The bigger scope implies a greater amount of resources needed to carry out an interna-tional project. More time is needed for proper planning, more money is needed due tohigher transportation and co-ordination efforts. Moreover, it is a challenge to recruitstaff with the language and intercultural skills needed in an international project.Mini Case 1.2 will provide you with the opportunity to analyse an international

project in the light of the characteristics we have just discussed.

Mini Case 1.2: One laptop per child

In January 2005, Nicholas Negroponte, co-founder and former Director of the MITMedia Lab, founded the One Laptop per Child (OLPC) non-profit association. With thehelp of other MIT faculty members as well as companies such as 3M, Advanced MicroDevices (AMD), Google, News Corporation, Nortel, Red Hat and others, OLPC aims atdesigning, manufacturing and distributing laptops at a target price of 100 US$. Theselaptops shall be sold to governments in developing countries and distributed specifi-cally by schools on basis of one laptop per child. The idea is that these laptops are freeto these children. OLPC¥s objective is to produce a vital educational tool to transformthe content and the quality of these children‘s education.Considering that 60 per cent of the cost of a laptop resides in marketing, sales and dis-

tribution which do not occur at OLPC, experts from both academia and industry havecome together to provide these ultra-low cost, flexible, power efficient, responsive anddurable machines. As of 2007, initial discussions have been held with countries such as


20

Brazil, Thailand, India, Argentina and Egypt. Each country will get versions specific totheir local language. OLPC has chosen Quanta Computer Inc. of Taiwan as their originaldesign manufacturer (ODM) for the $100 laptop project. Manufacturing was said to beginwhen 5 to 10 million machines have been ordered and paid for in advance. As of thebeginning of 2007, countries like Nigeria and Libya have committed each to one-millionplus units. The preliminary schedule has been met, and in November 2006, the first 875B1-Test machines left the assembly line. In February 2007, the B2 Test machines weredeployed to the chosen launch countries: Brazil, Argentina, Nigeria, Libya and Thailand.To make them useful in their environment, the laptops are equipped with devices to loadtheir batteries manually. Their colour display can be switched to a high resolution mono-chrome display that is better to read in plain sunshine. However, things turned out to bemore difficult than anticipated. As of May 2008, only some 100,000 units were sold. Thecost of the laptop is twice as high as planned.

Source: Laptop.org (2007a, 2007b, 2007c); TED (2006); OLPC Wiki (2007); dpa (2008); Surowiecki (2007)

Task

Identify the main characteristics making the initiative ‘one laptop per child’ an interna-tional project.

With the main characteristics of an international project in mind, we cannot helprecognizing that managing such a multifaceted thing is a daunting task that requiresspecial knowledge and skills. And this is the purpose of the international project ‘writingthe textbook on international project management’: providing you with the relevantknowledge and skills. Let us have a look at what is necessary to lead an internationalproject to success.

WHAT DETERMINES THE SUCCESS OF INTERNATIONAL PROJECT MANAGEMENT?

1.9First we have to clarify what success means. For the purpose of this book, Iwill define success as the extent to which the pre-defined project purposewill be attained. We have to be careful, though, not to confuse successful

project management with the success of a project. The former might be measuredaccording to the ‘Magic Triangle’, i.e. in terms of cost, time, and quality. The latter can besubdivided into two questions:

1 What factors contribute to a successful project? 2 What factors lead to consistently successful projects?


Mini Case


Both questions are related to the overall success of the organization. Can anorganization develop project management as a competitive advantage? Can it repeatedlyuse projects as a means to position and reposition itself successfully in the (global) marketplace? We will deal with the above mentioned questions in Chapters 2 and 11. In the following, we will focus on what has to be done to achieve the purpose of the

project within the given constraints.We have to distinguish between ‘success criteria’ and ‘success factors’. According

to Lim and Mohamed (1999) success criteria are generic assessment standardsindependent of the type of project whereas success factors are more specific to aconcrete project and directly influence project results. Success factors are easilyconfused with the measurement of success which is done with so-called keyperformance indicators (cf. Chapter 7). The literature offers a variety of lists of criteria that are critical for project success

(Cooke-Davies, 2004; Pinto and Slevin, 1988). I have selected the most relevant in thecontext of international projects and will interpret them in the light of theparticularities of international projects. The order of the points does not implydecreasing importance.

GOAL COMMITMENT OF PROJECT TEAM AND INITIALCLARITY OF GOALS

Due to the great diversity prevailing in international projects, it is extremely challeng-ing to formulate a goal in a way that all project members feel strongly committed to.Another challenge is maintaining the commitment over a longer period of time whichoften is necessary due to the long duration of international projects.

ESTABLISHMENT OF SMOOTH COMMUNICATIONS AND SUPPORTING INFRASTRUCTURE

It is critical for success to be able to communicate quickly and effectively across tempo-ral, organizational, functional, geographic and cultural boundaries. This requires acommon language and intercultural communication skills. All project members need tobe able to communicate sufficiently in a common language such as English, Spanish,Mandarin, Arabic, or any other world language. All project members have to be able touse modern communication technology. This might sound like stating the obvious.Due to different technological development levels of the project sites, ICT and thelevel of PC literacy might differ hugely between members of the international project.

ADEQUATE PROJECT TEAM CAPABILITIES

In international projects, project members need to have sufficient technical capabilitiesto perform well, including the communication capabilities outlined above. Moreover,



22

the project members or at least the leaders of the international project need to havemore interpersonal competences, namely in the area of intercultural management andlanguages. Leaders of international projects have to be aware of the nature of culturaldifferences, and have to be trained in efficiently working in and with diversity. Ideally,they can turn differences into greater creativity (cf. Chapter 10).

CONSIDERATION OF CONTEXT

Project managers have to pay special attention to the diversity and complexity of inter-national projects, partially due to differences in context. The international project hasto deal with a variety of heterogeneous stakeholders. It also has to put up with differ-ences in infrastructure, jurisdiction, and, of course, culture.

RIGHT BALANCE BETWEEN COMMON METHODOLOGYAND FLEXIBILITY

Risk propensity and the need for changes in a dynamic environment is high in interna-tional projects. Hence, the project manager and his or her team need to allow for flex-ible and swift responses. At the same time, they have to maintain cohesion among theheterogeneous stakeholders with a common project management methodology like aproject master plan. The project manager needs to be willing and able to take the riskto depart from the original plan, though, in order to cope with a dynamic and complexenvironment.

SUPPORTIVE PROJECT CULTURE

A crucial critical success criterion which is rarely mentioned in classical models is the proj-ect culture. Any culture of an international project needs to be ethno-relative. Based on anattitude of open-mindedness, responsiveness and flexibility, no preferences are given to anynational (or organizational) culture. No culture should be regarded as superior to another.A supportive project culture allows for fusing customs, habits or behaviours from variouscultures if it serves project success. The prerequisite of such an ethno-relative culture is theacknowledgement of differences and their respect. Open-mindedness and respect enablethe creation of trust among diverse stakeholders, which in turn is the prerequisite for effec-tive learning in and from projects, as will be explained further in Chapter 11. Ideally, the project culture supports the achievement of the given tasks and

simultaneously functions as a common reference frame in terms of behaviour andcommunication to all parties involved in the international project. We will discussproject and organizational culture in detail in Chapter 2.

Knowing the criteria for success as summarized in Figure 1.6 is important for efficientlyworking in and managing international projects.



WHAT IS THE STRUCTURE OF THIS TEXTBOOK?

1.10I will wrap up this chapter by outlining the structure of this book. Ihave selected two reference frames to explain the main topics, and toindicate the areas which are out of scope. First, this book’s structure

is described from the perspective of the APM Body of Knowledge in its 5th edition (APM,2006b). Second, the structure of this book is explained from an open system theoryperspective.

APM KNOWLEDGE AREAS PERSPECTIVE

Figure 1.7 illustrates the seven APM knowledge areas with their headings. Below thetitles of each knowledge area, you find the numbers of the chapters of this textbookthat chiefly deal with the respective knowledge area. The APM knowledge areas four and five are only marginally dealt with, whereas

knowledge area seven is deeply analysed in this book, with one chapter for eachknowledge sub-area. Reflecting the requirements of successful international projectmanagement as explained above, I have dedicated special attention to:


Criticalsuccess

criteria forinternational

projectmanagement

Goal commitmentof project team

and initial clarity ofgoals

Establishment ofsmooth

communicationsand supportinginfrastructure

Adequate projectteam capabilities

Consideration ofcontext

Right balancebetween commonmethodology and

flexibility

Supportive projectculture

FIGURE 1.6 Key success criteria for international project management


24

• management methods suitable for a dynamic, complex, fast changingenvironment

• context management (externalities) • peoples management• culture Management.

In the following I relate the content of each knowledge area of the APM Body ofKnowledge to the content of the chapters of this book.

1 Project management in context

Comprises project management, program management, portfolio management, proj-ect context, project sponsorship, and project office. This knowledge area is discussed in Chapters 1, 2, and 3 with special emphasis on

project context due to its importance for international projects.

2 Planning the strategy

Comprises project success and benefits management, stakeholder management, valuemanagement, project management plan, project risk management, project qualitymanagement, health, safety and environmental management.


Area 1

ProjectManagement

in Context

Chapters 1, 2, 3

Area 2

Planningthe Strategy

Chapters 2,3,4,5

Area 3

Executingthe Strategy

Chapters 3, 4, 5, 7

Area 4

Techniques

Chapter 5

Area 5

Businessand

CommercialChapter 6

Area 6

Organizationand

GovernanceChapters 1, 3, 5,

6, 7, 11

Area 7

People andthe

ProfessionChapters 8, 9, 10,

11

Additional Area, NOTcovered by APM

Culture

Chapters 1, 2, 3, 4, 5, 6, 7,8, 9, 10, 11

FIGURE 1.7 Coverage of APM knowledge areas in this book


Project success and benefits management is discussed in Chapter 2. Stakeholdermanagement is discussed in Chapter 3, project management plan in Chapters 3 and 5,and project risk management in Chapter 4. Project quality management is onlytouched on in Chapter 5 regarding the particularities of an international project. Theother areas are out of scope.

3 Executing the Strategy

Comprises scope management, scheduling, resource management, budgeting and costmanagement, change control, earned value management, information managementand reporting, and issue management. Scope management is discussed in Chapters 3. Chapter 5 gives an overview of

scheduling, resource management, budgeting and cost management. Chapter 7introduces change control, earned value management, reporting and issue management.

4 Techniques

Comprise requirements management, development, estimating, technology management,value engineering, modelling and testing, and configuration management. Due to the international focus of the book and the constraints regarding space, the

technical areas are only marginally discussed in Chapters 3 and 5. This does not mean that‘techniques’ are not important. On the contrary, much more research is needed in that area.I have listed further literature for the interested reader at the end of this chapter.

5 Business and commercial

Comprise business case, marketing and sales, project financing and funding, procure-ment, legal awareness. Here again, I have only partially touched on procurement issues and legal awareness

issues in Chapter 6, all other areas are out of scope. For a detailed analysis, furtherreading is recommended.

6 Organization and Governance

Comprise project life cycles, concept, definition, implementation, handover and closeout,project reviews, organization structure, organizational roles, methods and procedures,and governance of project management.Project life cycles are discussed in Chapter 1, concept and definition in Chapter 3,

implementation in Chapter 7, handover, closeout, and project reviews in Chapter 11,organization structure, organizational roles, methods, and procedures and governance ofproject management in Chapter 6, and communication governance in Chapter 8.

7 People and the profession

Comprise communication, teamwork, leadership, conflict management, negotiation,human resource management, behavioural characteristics, learning and development,and professionalism and ethics.



26

The people-related area is the most important when it comes to international projectmanagement, especially due to the fact that people cannot be separated from the otherareas described above: ‘It is not as if there are some factors that involve processes, andothers that involve people – people perform every process, and it is the people thatultimately determine the adequacy’ (Cooke-Davis, 2002: 189). I focus on ‘People and the Profession’ in this book, discussing communication and

negotiation in Chapter 9, leadership, behavioural characteristics, and human resourcemanagement in Chapter 8, conflict management in Chapter 10, and learning anddevelopment in Chapter 11.

Additional knowledge area: culture

People and their actions are heavily influenced by culture. Thus, culture is an impor-tant factor impacting on people’s behaviour, and also in projects. However, culture isnot mentioned in the APM Body of Knowledge. As culture plays a decisive role ininternational project management, special attention is given to it throughout the entirebook. In each chapter I will point the reader towards the cultural particularities stan-dard project management methodology may need to incorporate. Another area which is not explicitly mentioned in the APM Body of Knowledge is

‘learning’ in the sense of a learning organization. It is argued that the continuousenlargement of the capabilities of an organization becomes a strong competitive edge,especially in a globalizing world. Hence, Chapter 11 is dedicated to ‘learning in andfrom international projects’, touching on individual learning as covered in the APMBody of Knowledge, but also on organizational learning. Project management standards are useful to provide the student and practitioner

with a framework of relevant knowledge in the field of project management. However,you have to be sensitive to not cutting and pasting this standard without furtherreflection about applicability in an international context.

OPEN SYSTEM PERSPECTIVE

Let us switch perspectives, turning away from project management standards andlooking at international project management from the angle of an open system, theorganization. Across sectors and geographical borders, an increasing number of organ-izations use project management to implement their strategy. As project managementbecomes an overarching theme in the management of organizations, it should be moreclosely tied to the main elements of an organization, rather than be viewed as a sepa-rate ‘thing’ existing in parallel to the organization. I think that project managementshould be integrated in how the organization determines and implements its strategy,how the organization is structured, how the organization ticks, which systems andprocesses it is based on, how the organization’s staff is led, what knowledge the staffhas, and what the organization’s capabilities are. As projects are managed within thecontext of an open system, the organization, we have to keep all those organizational



areas attuned to the needs of efficient and effective project management and vice versa.This book aims at providing the reader with a holistic view on project management.To illustrate this approach, I have adapted (see Figure 1.8) the well-known

McKinsey Seven-S-Model comprising ‘hard’ and ‘soft’ areas of an organization: Style,Staff, Shared Values (Organizational Culture), Skills, Structure, Strategy and Systems(Bate, 1994). I have extended the Shared Values to Culture in a broader sense,including national and functional cultures, and supplemented the model by another ‘S’for ‘Stakeholders’ to properly reflect the main areas of importance in internationalproject management.

SUMMARY

An international project is typically more complex, dynamic, and riskier than a ‘standard’project. It has to address the diversity of its stakeholders mainly in terms of nationalcultures, organizational cultures, functional cultures, languages, and educational back-ground. The context of international stakeholders and an international environment with


Systems Stake-holders

Style

Staff

CultureSkills

Strategy

Structure

Chapters 4,5, 7 Chapter 3

Chapter8

Chapters9, 10

Chapter2

Chapter6

Chapter11

Commontheme

throughall chapters

Project-drivenCompany

FIGURE 1.8 The content of this book from an open system’s perspective


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its heterogeneous jurisdictions plays an important role in the management of internationalprojects. Project management emerged from the US military. Hence, it is rooted inAnglo-American values. When applied in other countries and contexts, the methodologymight need to be modified. Key criteria for successfully managing international projectsare goal commitment of the project team and absolute clarity of goals, the establishmentof smooth communications and general infrastructure, the consideration of context, ade-quate project team capability and project members’ sensitivity to local cultures, the rightbalance between flexibility and project management methodology as a common refer-ence frame, and the establishment of an ethno-relative project culture reflecting open-mindedness, respect, and trust.

KEY TERMS

Project, project management, project management life Cycle, stakeholder, project owner,project sponsor, contractor, customer, user, project manager, project management team,program, general systems theory, open system, international project, complexity, risk,uniqueness, diversity, heterogeneity, dynamics, lmited resources, success criterion,Success Factor.



REVIEW TASKS

Questions

1 Where do you see the main differences between a ‘standard’ and an international project? 2 In your opinion, what can impede the successful management of an international project? 3 How helpful are global standards for international project management?

EXERCISE

1 Work in groups of five or six people, if possible from different cultures (national, organizational orfunctional) or with different (educational) backgrounds.

2 First, you individually think of your personal experience in the last five years. What would you classifyas an international project?

3 Use Figure 1.5 to characterize the project you have in mind and explain it to your fellow students inyour group.

CHAPTER END CASE: THE WORLD BANK‘S GLOBAL PROGRAMFOR AVIAN INFLUENZA CONTROL AND HUMAN PANDEMIC PREPAREDNESS AND RESPONSE

EMERGENCE OF HIGHLY PATHOGENIC AVIAN INFLUENZA

In 1997, the avian influenza virus or bird flu first surfaced in Hong Kong. Since then, it has remained largely adisease affecting birds with sporadic infections of humans who had contact with infected fowl. Hundreds ofmillions of birds have died or been culled because of the virus since 2003. Until January 2007, 163 peoplewere reported to have been killed by the virus, mostly in Indonesia, Vietnam, Thailand, and China. In 2006, thevirus became deadlier: 70 per cent of the infected persons died from it.Between 2003 and 2005, avian influenza was reported from 15 countries, mainly in South-East and

Central Asia. By May 2006, the highly pathogenic avian influenza (HPAI), also called H5N1, had spreadto 45 countries. In some countries, it was only found in wild fowl, in other countries and regions, like inIndia, Africa, the Middle East, and Europe, the virus was identified in domestic and commercial poultrypopulations. Between 2003 and early 2007, the virus had caused estimated economic losses to theAsian poultry sector of around 10 billion US$. It has destroyed the livelihoods of hundreds of thousandsof poor livestock farmers. It jeopardizes commercial poultry production, and is an increasing obstacle toregional and international trade.

RISK OF A PANDEMIC?

The fact that there has been a recent continual increase in the number of known cases of avian influenzatransmission has raised concerns over the potential appearance of a human pandemic which could haveextremely harmful effects on the health and livelihood of all human beings. However, it is extremely uncertainwhether or when a pandemic will emerge. Since the sixteenth century, three pandemics were recorded on



30

average per century. In the last 100 years, pandemics occurred in 1918, in 1957, and in 1968. The mostsevere one was the one in 1918, the so-called Spanish influenza, with an estimated rate of 50 million deathswithin 18 months. A pandemic today would travel faster, given the improvements in transportation. Expertsforecast a death toll between 2 to 50 million for an avian influenza pandemic. This would not only put highrequirements on countries’ health systems, but would also result in unprecedented social and economicimpact. According to World Bank estimates, the cost of a pandemic could amount to 1.5–2 trillion US$ in asevere pandemic scenario.

GLOBAL PROGRAM FOR AVIAN INFLUENZA

MAIN PLAYERS

In the light of the unprecedented potential harm incurred by an avian influenza pandemic, the WorldBank, along with other agencies of the UN system (Food and Agriculture Organization (FAO), WorldHealth Organization (WHO), together with the World Organization for Animal Health (OIE), a globallyoperating intergovernmental organization, started to design a Global Program for Avian Influenza (GPAI)in 2005. Why those organizations? The World Bank has the infrastructure and ability to work across sec-tors, to raise funds, and to mobilize technical assistance and knowledge sharing activities at the regionaland global levels. The World Health Organization specializes in public health on a global level. The Foodand Agricultural Organization and the Organization for Animal Health are the experts in agriculturalissues and animal health. The program is scheduled to be implemented over three time-frames: immediate to short (1–3 years), short

to medium (4–6 years) and medium to long-term (7–10 years). It involves numerous players, namely in the areas of health, agriculture, economics, finance, and planning.

Apart from the international organizations mentioned above, the world’s governments, together with manynon-governmental bodies, private entities and international scientific, developmental, humanitarian andsecurity organizations are involved in the program. Some 25 countries received financing under this programby the end of 2006, including Vietnam, Bangladesh, India, Nigeria, Ethiopia, Turkey, and Romania. In theinfected countries and the non-infected at-risk countries, governmental agencies committed to controllingtrans-boundary animal diseases are part of an integrated, multi-sector response to the threat posed by thedeadly disease. In some countries, the military has also to be considered because it plays a major role inemergency cases.

OBJECTIVES

The long-term objectives of the program are:

• diminishing the global threat of a human pandemic • stabilizing poultry production • supporting a robust regional and international trade in poultry and poultry products • increasing human and food safety • improving the livelihoods of the rural poor.

What concrete activities lead to the accomplishment of these objectives? Simply put, it is the carefuladherence to basic public health and infection control measures, for instance contact investigation, and



infection control at healthcare facilities. Given the uncertainty and the lack of knowledgeregarding the spread and persistence of H5N1, the program also supports furtherresearch and investigations into avian influenza. Yet, it will not be easy to achieve thegoals due to the complex interface between farming systems, livestock trade, food safetyand public health.

The activities described need to be embedded into a strong common vision. It is alsoimportant to adapt the global measures to local contexts, tailoring the various activities to localneeds. The countries have a great variation in capacity to deal with the outbreak of a seriousdisease. The global program consists of many single projects which are dedicated to realizethe above mentioned objectives with measures that are adapted to local conditions.

ISSUES

There are different sources of financial resources: internal resources of the infected andat-risk countries, funding provided by international organizations, but also fundingthrough a so-called multi-donor trust fund which mainly supports countries that lack finan-cial resources, for example in Africa. By April 2006, the economic heavyweights likeChina, the EU countries, Japan, Russia, and the USA, but also smaller countries likeSaudi Arabia, Singapore, South Korea and Thailand, together with the EuropeanCommission, the Asian Development Bank and the World Bank, had provided an overallsum of almost 1.9 billion US$ for the program. Yet, too few financial resources are avail-able for the program as of the end of 2006. Another issue is the lack of support for com-munications. People need clearer and more comprehensive information regarding the riskand outbreak of the disease. Recently, more difficulties have emerged as reflected in the following example of Indonesia. Indonesia is the country worst affected by bird flu. It has recorded 85 cases, of which

64 had been fatal. To protect the world’s population from a pandemic, WHO wants todevelop a vaccine against the virus. Consequently, it needs samples of the virus. InFebruary 2007, the director-general of WHO gave a written guarantee to the Indonesianhealth minister stating that no avian influenza samples were passed on to companies forcommercial use. However, Indonesia wants a legally binding agreement before it willshare samples with WHO. The Indonesian government is afraid of the use of samples forcommercial purposes without its permission. The deputy health minister for researchfeels that Indonesia has been cheated by WHO before, as it allegedly had passed onsamples to companies. He says that good relationships can be restored quickly, but onlyif WHO respects Indonesia. International avian influenza experts consider the withholding of the samples as a great risk

to global health because Indonesia is considered not to have the expertise to determinewhether the virus is mutating into a form which could trigger a global pandemic. Other expertsunderstand the tough stance of the Indonesian government as it would have to pay millions ofdollars for vaccines to pharmaceutical companies which would have obtained the samples forfree. They feel that it is only ethical to share risks and benefits. As of May 2008, Indonesia and other countries reluctant to share information about their

viruses have started to share information using a freely accessible global database. Until then,



32

WHO had kept crucial information in a private database at a USA government laboratory in Los Alamos, USA,with limited access for 15 other laboratories only.

Source:: AP (2008); Financial Times (2007); The Economist (2007b); The World Bank (2005); The World Bank(2006a); The World Bank (2006b); The World Bank (2006c); The World Bank (2006d); The World Bank (2006e); TheWorld Bank (2006f); The World Bank (2007)

QQuueessttiioonnss

1 Assuming that the same characteristics apply to a program and project: what are the characteristics ofthe Global Avian Influenza Program which make it an international program?

2 Who are the main stakeholders of the Global Program on Avian Influenza? 3 What are the key success criteria of this international program?


FURTHER READING Thamain, Hans J. (2005) Management of Technology.

Managing Effectively in Technology-IntensiveOrganizations. New Jersey: John Wiley & Sons. (Thisbook gives very detailed insights into project manage-ment knowledge areas that are out of scope of this book.)

Turner, J. Rodney (ed.) (2003) Contracting for ProjectManagement. Aldershot: Gower. (This books coversvery well the commercial project management knowl-edge area that is omitted in this book.)

Cleland, David I and Roland Gareis (eds) (2006) Global ProjectManagement Handbook. Planning, Organizing, andControlling International Projects. 2nd edition. New York:McGraw-Hill. (This reader covers many aspects relevantfor managing international projects in great detail. Part 5

provides interesting insights into project management inAustria, China, Australia, Romania, and Japan.)

Murphy, Owen Jay (2005) International Project Management.Mason: Thomson. (For those readers who miss adefence industry perspective. The US-American authorhas a military background.)

In addition, the following journals publish interesting articlesabout the topic:

• International Journal of Project Management (Journalof the European International Project ManagementAssociation)

• European Management Journal• PM Network• Project Management Journal (Journal of the Project

Management Institute PMI)


introduction tointernational 1 projectmanagement · introduction 1.1...

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